Tip of the Week
The Essential Elements of Referrals
There's a lot of talk these days about "social networking" - often referring to online services such as Face Book, My Space, Linked In, Twitter and so on. People either seem to really love these new tools or are deathly opposed. There doesn't seem to be a lot of middle ground. No doubt many of you use some of these resources and have an opinion one way or the other. Regardless how you feel about the "new" social networking tools, when you really think about it, social networking is an age old business practice. At its essence, it's all about referrals. The art and science of asking for and giving referrals is at the heart of effective marketing and sales efforts in all lines of business, including the SBA business.
So what constitutes an effective referral? Essentially, people want to "look good" when they are making a referral. They are putting their own name and reputation on the line and they cannot afford to be burned. In order to get a referral, so you can satisfy that fundamental need of the referrer looking good, here is a short list of elements that we think are critical for developing and sustaining quality referrals.
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Useful - you provide a known or perceived need; you fill a gap in the market
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Competent - you must be capable and proven
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Consistent - dependability is critical; there must be a low risk of failure
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Accessible - easy to do business with, reasonable, and good natured
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Effective - bottom line, you get it done well, on time, and within budget
Now let's relate these essential elements to our business, the SBA lending business. First, is SBA lending useful, important - does it fill a gap or provide a known or perceived need. YES, absolutely. Now more than ever, SBA loans are filling a critical gap in the small business lending marketplace as evidenced by declining conventional bank lending and increasing SBA lending. The 7(a) program has long been considered a counter cyclical program to fill a need when credit is not otherwise available.
Next, think about the competency test. Do you know lenders who try to lend using SBA but they simply are not set up to do so? They do not have the right people, in the right places, doing the right things - and they will get what they get - a mess of repairs and denials of liability from SBA if and when many of those deals go down. Would you feel comfortable sending a friend or family member to such a lender? Of course not! They probably wouldn't have a good experience and you wouldn't look good in the process. We always refer people to those whom we know are good at what they do.
Consistency is next. Have you ever told someone about a restaurant that you really enjoyed only to find out later they hated it? They said the food was mediocre to poor, the service was awful and what were you thinking referring us over there? When we refer folks to a business, a service provider etc - we want to know that they are going to get a reliable, quality experience similar to what you had. We must be able to depend on and trust that what we say is true, will be true. It takes a long time to build up a reputation for quality and consistency; and only one bad experience to erode it.
Then there is Access-ability. This is about being easy to do business with - relatively easy to contact, in person, by phone or by email. Additionally, it is important that we are approachable and understandable - that we treat others with respect and with professionalism. Responsiveness goes hand in hand here: do we follow the Sundown Rule and return all calls by the end of the day as often as possible? Remember the old adage (we probably learned it in Kindergarten) - treat others as you wish to be treated. It's simple human courtesy but amazingly, many fail in this department, and they wonder why they can't get anyone to refer them business!
Last but not least, we have the acid test - are we effective? This is all about pulling it all together - providing a reasonable product, for a fair price, on time (or ahead of schedule) - bottom line, it's about providing true value. Is the product or service worth it and if the need arose, would you go back again?
It's a great compliment, and an important business favor - to provide a referral. It is also a tremendous service to the person or group you are helping because it helps them wade through the myriad of possible sources of assistance or various products and it makes their buying decision much more efficient. Good referrals save time and money.
Some of you have referred us to others and we want to take this opportunity to sincerely say Thank You - we are truly grateful. As a small business ourselves, referrals are the lifeblood of what we do and we owe much of our success to those who have stood behind us. If you think you have a need for our services, we would be happy to provide references of those who are graciously willing to provide a reference, a referral if you will. They know we won't let them down.
We look forward to visiting with you soon. If you can think of a lender that could benefit from our service, please let us know by email or phone - we won't let you down either.
Finally, long time readers of our weekly "Tip of the Week" know that we cover a wide range of topics of interest to SBA lenders - both 7(a) bank lenders and CDC personnel. We also share this weekly piece with SBA folks at Headquarters, the SBA Centers and in each of the District Offices. Many of you have asked if you can share this newsletter with a colleague or friend and the answer is YES, by all means. Simply direct them to our website homepage www.sbaaccess.com and they can opt in by inputting their name and email address in the upper right hand corner boxes. The more the merrier.
Take the Right Approach
Brian Burke and Karen McHugh
SBA Access ©2009 - All Rights Reserved
All content is copyrighted and unauthorized use is strictly prohibited. If you would like to quote any part of this text, email bburke@sbaaccess.com or kmchugh@sbaaccess.com for permission.
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